By Adam Gorley

A recent study from Statistics Canada looks at the Earnings of women with and without children, to determine the causes and degrees of a significant difference in wages between the two groups. What the study finds is that the gap is real, but it is not simply a result of direct employment discrimination based on motherhood or pregnancy. Several factors come into play, and the report asserts that a part of the earnings difference can be accounted for by effects of pregnancy and motherhood, in particular: lost (or “un-acquired”) experience due to time away from work-career interruptions specific to women. However, a number of other factors-both related to motherhood and not-account for a larger part of the gap.

Findings

Simple age-earnings profiles clearly point to a gap in wages between mothers and childless women. In 2004, a 30-year-old mother earned on average $15.20 per hour, compared to $18.10 for a childless woman of the same age. The average earnings difference for women of all ages was approximately 12 percent.

The earnings gap appears to begin small or negligible. The study finds that a 20-year-old mother and a childless woman have similar wages. However, as young mothers age, their earnings do not grow as quickly or as high as comparable childless women. This suggests that working mothers might never make up the earnings gap.

In addition, the more children a woman has, the greater the earnings gap. In 2004, an average mother with one child earned nine percent less than a childless woman; at two children, the gap widened to 12 percent; and at three or more children, the gap expanded to 20 percent.

It should come as no surprise that longer career interruptions lead to larger wage gaps. According to the study, mothers who took breaks from work of more than three years earned consistently and significantly less than those who took shorter breaks and childless women-at any age. But at 40, mothers who took breaks of three years or more earned nearly 30 percent less than childless women. Meanwhile, mothers with career interruptions of one to three years perform comparably to childless women. Through their 20s and early 30s, these mothers earn less than other women, but through their 30s the gap closes. However, it opens again in the 40s.

Many might be surprised that highly educated mothers suffer a larger earnings gap than low-educated mothers, compared to similarly educated childless women. However, women who delay having children until their 30s actually earn more than their non-delaying and childless counterparts. A woman who delays childbirth until the age of 30 or later earns on average 10 percent more than a childless woman of the same age, until the age of 40, when the earnings converge.

Furthermore, not only can motherhood reduce a woman’s earning power, but it can also prevent mothers from working entirely. If a mother or family doesn’t earn enough to cover the cost of daycare, for example, the mother might simply remain at home with her child. One recent StatsCan survey found that finances prevented more than 40 percent of new mothers from taking maternity leave; and of those mothers who did take maternity leave, more than 80 percent said that if they could have afforded to, they would have remained off of work for longer.

What it all means

As mentioned above, there are several factors at play in the earnings gap between mothers and childless women. The authors note that the earnings gaps “do not necessarily represent the true disadvantage incurred by women with children because earnings are determined not only by age and the presence of children, but also by [observable] factors such as work experience, education, industry, occupation, union membership and unobserved individual characteristics like career motivation and ability.”

According to the study, approximately 70 percent of the earnings gap can be explained by a woman’s age, education, experience, marital status, industry and occupation-observable factors. Controlling for these factors finds the gap shrink significantly: in this scenario, mothers with one child experience an earnings gap of two percent; with two children, three percent; and with three or more children, six percent. And there are also statistically unobservable factors at play.

What this means is that, while it is clear that a gap exists between the earnings of mothers and childless women, it is difficult to determine precisely how much of the gap is actually due to the presence of children. More study is clearly needed, but it is at least comforting to know that human rights legislation in Canada protects pregnant women and mothers with regard to employment, and recently some advances have been made on parental leaves.

Perhaps more importantly, employers are getting the message that helping mothers and pregnant employees is good for business. This means providing help with childcare, either through onsite operations or financial assistance; offering flexible work arrangements, like telecommuting or alternative work hours; encouraging and helping new mothers to reintegrate into work; and generally promoting mother-friendly workplaces.

At the same time, you might have heard some of the recession stories floating around of employers laying off pregnant employees or employees on maternity leave in order to reduce their staff and save money. These are unfortunate stories indeed, and for the most part clearly discriminatory. It’s hard to imagine what sort of employer would target such vulnerable employees for layoff, but these are desperate times for some businesses, and I guess some are willing to try such a desperate measure-at the risk of a human rights complaint and maybe even a larger cash payout than if they’d simply kept the employee!-not to mention the hit to morale.

No matter how desperate things are, everyone deserves to be treated equally. It seems clear from our human rights progress that we are on the path to equality, but from this study and the recent news it’s also clear that we’ve got a long way to go.

Source: Statistics Canada

Adam Gorley is assistant editor at HRinfodesk.com–Canadian Payroll and Employment Law News. 

 Originally published in HRinfodesk–Canadian Payroll and Employment Law News and Developments July 2009.

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